By Andrea Heisinger
New York, Dec. 5 - Humana Inc. priced $1 billion of senior notes (Baa3/BBB/BBB) on Wednesday, an informed source said.
A $600 million tranche of 3.15% 10-year notes priced at 99.61 to yield 3.196% with a spread of Treasuries plus 160 basis points. The notes feature a make-whole call at Treasuries plus 25 bps until Sept. 1, 2022, with a par call after.
The company also sold $400 million of 4.625% 30-year bonds at 99.937 to yield 4.629% with a spread of 185 bps over Treasuries. The tranche has a make-whole call at Treasuries plus 30 bps until June 1, 2042 and a par call after that date.
There is a change-of-control put feature a 101%.
Active bookrunners were Bank of America Merrill Lynch, Goldman Sachs & Co. and Morgan Stanley & Co. LLC. Passive bookrunners were J.P. Morgan Securities LLC, Wells Fargo Securities LLC and U.S. Bancorp Investments Inc.
A portion of the proceeds will be used to pay the acquisition price for Metropolitan Health Networks, Inc. and to retire Metropolitan debt, along with related fees and expenses.
There is a mandatory redemption if the Metropolitan acquisition is not done by May 31, 2013.
Humana last priced bonds in a $750 million sale in two tranches on June 2, 2008. That offering included 7.2% 10-year notes sold at 325 bps over Treasuries and 8.15% 30-year bonds priced at 350 bps over Treasuries.
The health care and insurance company is based in Louisville, Ky.
| Issuer: | Humana Inc.
|
| Issue: | Senior notes
|
| Amount: | $1 billion
|
| Bookrunners: | Bank of America Merrill Lynch, Goldman Sachs & Co., Morgan Stanley & Co. LLC (active), J.P. Morgan Securities LLC, Wells Fargo Securities LLC, U.S. Bancorp Investments Inc.
|
| Co-managers: | BB&T Capital Markets, LLC, BNY Mellon Capital Markets LLC, Citigroup Global Markets Inc., Credit Suisse Securities (USA) LLC, Fifth Third Securities Inc., PNC Capital Markets LLC, UMB Financial Services, Inc.
|
| Change-of-control put: | 101%
|
| Trade date: | Dec. 5
|
| Settlement date: | Dec. 10
|
| Ratings: | Moody's: Baa3
|
| Standard & Poor's: BBB
|
| Fitch: BBB
|
|
|
| 10-year notes
|
| Amount: | $600 million
|
| Maturity: | Dec. 1, 2022
|
| Coupon: | 3.15%
|
| Price: | 99.61
|
| Yield: | 3.196%
|
| Spread: | Treasuries plus 160 bps
|
| Call: | Make-whole at Treasuries plus 25 bps to Sept. 1, 2022, par call after
|
|
|
| 30-year bonds
|
| Amount: | $400 million
|
| Maturity: | Dec. 1, 2042
|
| Coupon: | 4.625%
|
| Price: | 99.937
|
| Yield: | 4.629%
|
| Spread: | Treasuries plus 185 bps
|
| Call: | Make-whole at Treasuries plus 330 bps to June 1, 2042
|
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